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Dollar Cost Averaging
Dollar cost averaging (DCA) is an investment strategy that aims to apply value investing principles to regular investment. The term was first coined by Benjamin Graham in his 1949 book ''The Intelligent Investor''. Graham writes that dollar cost averaging "means simply that the practitioner invests in common stocks the same number of dollars each month or each quarter. In this way he buys more shares when the market is low than when it is high, and he is likely to end up with a satisfactory overall price for all his holdings." Dollar cost averaging is also called pound-cost averaging (in the UK), and, irrespective of currency, unit cost averaging, incremental trading, or the cost average effect. It should not be confused with the constant dollar plan, which is a form of rebalancing investments. The technique is so called because of its potential for reducing the average cost of shares bought. As the number of shares that can be bought for a fixed amount of money varies inv ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Investment Strategy
In finance, an investment strategy is a set of rules, behaviors or procedures, designed to guide an investor's selection of an investment portfolio. Individuals have different profit objectives, and their individual skills make different tactics and strategies appropriate. Some choices involve a tradeoff between risk and return. Most investors fall somewhere in between, accepting some risk for the expectation of higher returns. In the field of economics, this decision is driven by finding the investment strategy that has the highest utility. Investors frequently pick investments to hedge themselves against inflation. During periods of high inflation investments such as shares tend to perform less well in real terms. The time horizon of investments also influences the strategy to be followed. Investments such as shares should be invested into with the time frame of a minimum of 5 years in mind. It is recommended in finance a minimum of 6 months to 12 months expenses in a rainy-da ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Behavioural Economics
Behavioral economics is the study of the psychological (e.g. cognitive, behavioral, affective, social) factors involved in the decisions of individuals or institutions, and how these decisions deviate from those implied by traditional economic theory. Behavioral economics is primarily concerned with the bounds of rationality of economic agents. Behavioral models typically integrate insights from psychology, neuroscience and microeconomic theory. Behavioral economics began as a distinct field of study in the 1970s and 1980s, but can be traced back to 18th-century economists, such as Adam Smith, who deliberated how the economic behavior of individuals could be influenced by their desires. The status of behavioral economics as a subfield of economics is a fairly recent development; the breakthroughs that laid the foundation for it were published through the last three decades of the 20th century. Behavioral economics is still growing as a field, being used increasingly in ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Suze Orman
Susan Lynn "Suze" Orman ( ; born June 5, 1951) is an American financial advisor, author, and podcast host. In 1987, she founded the Suze Orman Financial Group. Her work as a financial advisor gained notability with ''The Suze Orman Show'', which ran on CNBC from 2002 to 2015. Orman has written ten consecutive New York Times Bestseller list, ''New York Times'' bestsellers about personal finance. She was named twice to the Time 100 list of influential people, has won two Emmy Awards and eight Gracie Awards. Orman has written, co-produced and hosted nine PBS specials, and has appeared on multiple additional television shows. She has been a guest on ''The Oprah Winfrey Show'' approximately 29 times and ''Larry King Live'' over 30 times. Orman is currently the podcast host of ''Suze Orman's Women & Money Podcast''.About Suze Orman " SuzeOrman.c ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Asset Allocation
Asset allocation is the implementation of an investment strategy that attempts to balance risk versus reward by adjusting the percentage of each asset in an investment portfolio according to the investor's risk tolerance, goals and investment time frame. The focus is on the characteristics of the overall portfolio. Such a strategy contrasts with an approach that focuses on individual assets. Description Many financial experts argue that asset allocation is an important factor in determining returns for an investment portfolio. Asset allocation is based on the principle that different assets perform differently in different market and economic conditions. A fundamental justification for asset allocation is the notion that different asset classes offer returns that are not perfectly correlated, hence diversification reduces the overall risk in terms of the variability of returns for a given level of expected return. Asset diversification has been described as "the only f ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Lump Sum
A lump sum is a single payment of money, as opposed to a series of payments made over time (such as an annuity). The United States Department of Housing and Urban Development distinguishes between " price analysis" and " cost analysis" by whether the decision maker compares lump sum amounts, or subjects contract prices to an itemized cost breakdown. In 1911, American union leaders including Samuel Gompers of the American Federation of Labor expressed opposition to lump sums being awarded to their members pursuant to a new workers compensation law by saying that when they received lump sums rather than periodic payments, the risk of them squandering the money was greater. ''The Financial Times'' reported in July 2011 that research by Prudential had found that 79% of polled pensioners in the UK collecting a company or private pension that year took a tax-free lump sum as part of their retirement benefits, as compared to 76% in 2008. Prudential was of the view that for many re ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Volatility (finance)
In finance, volatility (usually denoted by "sigma, σ") is the Variability (statistics), degree of variation of a trading price series over time, usually measured by the standard deviation of logarithmic returns. Historic volatility measures a time series of past market prices. Implied volatility looks forward in time, being derived from the market price of a market-traded derivative (in particular, an option). Volatility terminology Volatility as described here refers to the actual volatility, more specifically: * actual current volatility of a financial instrument for a specified period (for example 30 days or 90 days), based on historical prices over the specified period with the last observation the most recent price. * actual historical volatility which refers to the volatility of a financial instrument over a specified period but with the last observation on a date in the past **near synonymous is realized volatility, the square root of the realized variance, in turn c ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Windfall Gain
A windfall gain is an unusually high or abundant income, net profit or profit margin, that is sudden, unexpected, or, at times, anticipated. Types Examples of windfall gains include, but are not limited to: *Unexpected inheritance or other large monetary gift from another *Sweepstakes winnings *Winning a lottery or success in another form of gambling *Returns on investments *Proceeds or profit from a large sale *Game show, or other contest winnings *Employment payroll bonus *Natural resources *Foreign aid *Proceeds from an insurance claim *Settlement from a lawsuit *Discoveries from treasure hunting Uses What people do with windfall gains is subject to much debate. While they differ from one account to the next, most economists hypothesize that the majority of the gains are saved, due to the Permanent Income Hypothesis The permanent income hypothesis (PIH) is a model in the field of economics to explain the consumption function, formation of consumption patterns. It suggests con ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
The Vanguard Group
The Vanguard Group, Inc. is an American registered investment adviser founded on May 1, 1975, and based in Malvern, Pennsylvania, with about $10.4 trillion in global assets under management as of 31 January 2025. It is the largest provider of mutual funds and the second-largest provider of exchange-traded funds (ETFs) in the world after BlackRock's iShares. In addition to mutual funds and ETFs, Vanguard offers brokerage services, educational account services, financial planning, asset management, and trust services. Several mutual funds managed by Vanguard are ranked at the top of the list of US mutual funds by assets under management. Along with BlackRock and State Street, Vanguard is considered to be one of the Big Three index fund managers that play a dominant role in retail investing. Founder and former chairman John C. Bogle is credited with the creation of the first index fund available to individual investors and was a proponent and major enabler of low-cost inves ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Arithmetic Mean
In mathematics and statistics, the arithmetic mean ( ), arithmetic average, or just the ''mean'' or ''average'' is the sum of a collection of numbers divided by the count of numbers in the collection. The collection is often a set of results from an experiment, an observational study, or a Survey (statistics), survey. The term "arithmetic mean" is preferred in some contexts in mathematics and statistics because it helps to distinguish it from other types of means, such as geometric mean, geometric and harmonic mean, harmonic. Arithmetic means are also frequently used in economics, anthropology, history, and almost every other academic field to some extent. For example, per capita income is the arithmetic average of the income of a nation's Human population, population. While the arithmetic mean is often used to report central tendency, central tendencies, it is not a robust statistic: it is greatly influenced by outliers (Value (mathematics), values much larger or smaller than ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Harmonic Mean
In mathematics, the harmonic mean is a kind of average, one of the Pythagorean means. It is the most appropriate average for ratios and rate (mathematics), rates such as speeds, and is normally only used for positive arguments. The harmonic mean is the multiplicative inverse, reciprocal of the arithmetic mean of the reciprocals of the numbers, that is, the generalized f-mean with f(x) = \frac. For example, the harmonic mean of 1, 4, and 4 is :\left(\frac\right)^ = \frac = \frac = 2\,. Definition The harmonic mean ''H'' of the positive real numbers x_1, x_2, \ldots, x_n is :H(x_1, x_2, \ldots, x_n) = \frac = \frac. It is the reciprocal of the arithmetic mean of the reciprocals, and vice versa: :\begin H(x_1, x_2, \ldots, x_n) &= \frac, \\ A(x_1, x_2, \ldots, x_n) &= \frac, \end where the arithmetic mean is A(x_1, x_2, \ldots, x_n) = \tfrac1n \sum_^n x_i. The harmonic mean is a Schur-concave function, and is greater than or equal to the minimum of its arguments: for positive a ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Market Timing
Market timing is the strategy of making buying or selling decisions of financial assets (often stocks) by attempting to predict future market price movements (market trends). The prediction may be based on an outlook of market or economic conditions resulting from technical or fundamental analysis. This is an investment strategy based on the outlook for an aggregate market rather than for a particular financial asset. The efficient-market hypothesis is an assumption that asset prices reflect all available information, meaning that it is theoretically impossible to systematically "beat the market." Approaches Market timing can cause poor performance. After fees, the average "trend follower" does not show skills or abilities compared to benchmarks. "Trend Tracker" reported returns are distorted by survivor bias, selection bias, and fill bias. At the Federal Reserve Bank of St. Louis, YiLi Chien, Senior Economist wrote about return-chasing behavior. The average equity mutual fund ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
